Business Studies – Researching The Feasibilty
A Year 10 enterprise group ‘Tempo’ in June 2007 sold a Yearbook to the Year 14 pupil’s that were leaving school. The purpose of the Yearbook was to let the pupil’s be able to reflect on their experiences, achievements, team performance and friendships. I am hoping to do something similar and so my aim is “to investigate the demand and potential profitability for a school year. ” This is to ensure that the price I charge and the quantity I make will reduce the threat of not breaking even. I will consider what Year 14 want to see in the Yearbook within a particular budget to make sure the Yearbook will sell.
The Yearbook is a limited edition so I believe a high percentage of the year group will want the book. If the book does not satisfy my targeted customers it will not sell and sales could fall below the breakeven point. It is important to research the consumers’ opinions on how much they would pay for the Yearbook as it illustrates how much they value the product as well as how I should price it. If I sold it at a low price I could lose profit as it would cost more money to manufacture the book than selling price. If I sold it at a high price I could also lose profit as the demand for the product would be lower.
I want to make the biggest profit I can so I want to charge as much as people will pay. I will need to research how many Yearbooks to produce but I am aware that there is a limited market. I do not want to produce more units than necessary but at the same time I wish to maximize sales. It would be my intention to find out how many people would want a Yearbook and I could get the Year 14 to order them so I make the exact amount and the biggest profit I can. I will research the profitability of the yearbook. I need to make sure that the Yearbook demand is high so I do not waste my time and effort constructing it.
To go through with the project I would have to study how high of profit I could make. There would be no point wasting time and money producing a Yearbook that does not make a reasonable profit. Method Market research is the collecting and analyzing information about the particular target market so I understand the consumers wants. This will help the project be a success as I need to meet the consumers’ needs as well as my own. I will use both field and desk research, or primary and secondary research, which will help me plan ahead rather than guess.
Primary research collects original information and is carried out by making direct contact with consumers and members of the public. This will be relevant for my project as my target market will be able to let me know what they would like and where etc. It is important that I study my target market to find out what they would like in the Yearbook to boost demand. They will not want to buy the book if they are not interested in the content. The advantage of creating a questionnaire is that it will supply simple results but important information.
We will split the year group into boys and girls and the questionnaire is an easy way to obtain detailed information about the product like if there was a Yearbook would they be interested in buying one. My questionnaire will consist of no more than 10 questions. It will help me gather the target markets opinions on the product. If a high percentage of the year group did not like the idea there would be no point producing a yearbook. If they did I could also find out information like how much would they pay for the book. It will set me guidelines on what way I should present it.
In order to carry out field research it is essential to use sampling. Many businesses use sampling to find out certain detail/s about their target market. It would cost too much and take too much of my time to organise and analyse answers from completed questionnaires from a whole year group, so sampling simplifies the process. Sampling involves selecting a small group of people to get a representative overview of the whole market. I had to choose between random sampling and quota sampling. Random sampling consists of using a computer to pick random people or picking 1 in every 10 people.
Quota sampling is when a limited number are selected from groups which have already been divided. I picked quota sampling as it suits my project best to determine who will be sampled for their opinions about the Yearbook. I will identify 15 students and chose in proportion to the gender ratio in each group. I will break them into gender ratio because if it was more appealing to girls rather than boys example, I could make the yearbook more attractive to girls rather than boys. The advantages of this are that my representative of the year group.